New Competitors with Different Economic Models

These arguments invite a closer look at the Internet advertising market. As anyone who follows search advertising knows, Google dominates not only because it dominates the search market but also (and this reason is too often neglected) because Google delivers. Advertisers spend more on Google than any other search engine because it offers them the best results—the best click-through rate (CTR), the best conversion rate, cost-per-click, cost per order, and so on.

But all of this can change. Dominating the search market does not automatically translate into dominating the advertising market, and competing search engines are always working to improve their performance. (And they have smart engineers, ...

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